In this article, we will take a look at the 11 best battery stocks to buy now. You can skip our detailed analysis of the battery industry’s outlook for 2021 and some of the major growth catalysts for battery stocks, and go directly to the 5 Best Battery Stocks to Buy Now.
The shift in global perspective about the need for electric vehicles and the push in developed countries to stimulate the market has enabled the meteoric rise of new companies in the arena. When compared to their internal combustion engine (ICE) counterparts, battery vehicles have a completely different design for their major components such as the drivetrain, chassis and powerplant. As a result, they require a new manufacturing approach that requires setting up new facilities with new machines capable of churning out the electric vehicles at a rate suitable for mass production.
At the same time market interest and investment in components crucial for producing these vehicles is also at all time highs. A crucial component of an electric vehicle, as one’s intuition would suggest, is its battery. The battery is at the heart of the vehicle as it holds the electric power necessary for traveling at distances ranging in hundreds of miles. So naturally, the outlook for battery manufacturers is also positive, since they stand to directly profit from the current electric vehicle boom.
For instance, research conducted by Allied Market Research reveals that while the electric vehicle sector was valued at $163 billion in 2019, it will grow at a massive compound annual growth rate (CAGR) of 22.6% to stand at $803 billion by 2027. During this time period, the research firm believes that North America and Europe will post the strongest and most astounding growth rate. For the former, this rate is slated to be at a whopping 27.5% with a total value of $194 billion, and for the latter, a growth rate of 25% will eclipse the North American trend. However, the biggest will be constituted of countries lying in the Asia Pacific region, where the market will be worth $358 billion.
A report by the International Energy Agency (IEA) outlines that by the end of 2020, more than 10 million electric vehicles were on the road, with the bulk of these being powered by batteries. Falling in line with Allied Market Research’s analysis, this report confirmed that the European electric vehicle segment grew faster than China in 2020, but that the biggest contribution to the global electric vehicles still came from the Asian country. Crucially, since the IEA is a policy advisor, it estimates that if all existing electric vehicle and environmental policies are followed through, then the total number of electric vehicles deployed globally will increase from 11 million (including heavy-duty vehicles) from 2020 to stand at 145 million in 2030 with a growth rate of 30%.
Zoning in on batteries, a report from KPMG shares that in 2019, China had 62.2 Gigawatts-hours of installed electric vehicle battery capacity. Another research report from Markets and Markets reveals that the global lithium-ion battery market is expected to stand at a total value of $41 billion by the end of this year and grow at a CAGR of 12.3% to stand at $117 billion in 2030. Lithium-ion batteries are the most commonly used batteries in the world and they also are the major type of battery used in electric vehicles.
Some of the most notable and active battery stocks in the market include Enphase Energy, Inc. (NASDAQ: ENPH), Livent Corporation (NYSE: LTHM), Albemarle Corp (NYSE: ALB) and Plug Power Inc. (NASDAQ: PLUG), among others discussed in detail below.
Pixabay/Public Domain
Our Methodology
In order to determine which battery stocks are the best pick, we will use the simple methodology of past growth. This will let us sift out the winners from the losers and let us determine which companies have received the strongest investor attention over the past couple of years. Companies that are yet to scale their operations, have a large total addressable market (TAM) or have crucial products in the research and development stage often see strong share price growth that does not correspond with their revenue or earnings. Yet, a strong share price signals investor optimism, which is often linked to companies meeting goals or targets that are considered crucial for their long-term vitality.
We also took into account hedge fund sentiment while choosing these stocks based on the number of hedge funds having stakes in each stock according to the data of 873 funds tracked by Insider Monkey.
Why pay attention to hedge fund sentiment while choosing stocks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
11 Best Battery Stocks to Buy Now
11. EnerSys (NYSE:ENS)
Share Price Growth Over the Last 12 Months: 17%
Number of Hedge Fund Holders: 19
EnerSys (NYSE: ENS) is an American company headquartered in Reading, Pennsylvania. It has a large portfolio of power and power management products and it is known for its batteries for internal combustion engine (ICE) vehicles. Its experience in the automotive sector makes it an important player in the battery market, despite the modest share price growth over the past year. EnerSys (NYSE: ENS) is also known for manufacturing batteries that are used in satellites manufactured inside the United States and the United Kingdom.
10. Panasonic Corporation (OTC:PCRFY)
Share Price Growth Over the Last 12 Months: 41.68%
Number of Hedge Fund Holders: N/A
Panasonic Corporation (OTC: PCRFY) is one of the largest and oldest multinational companies in the world with a presence in a large array of markets. In the electric vehicle segment, Panasonic is best known for its partnership with Santa Clara, California electric vehicle manufacturer Tesla, Inc. Panasonic and Tesla jointly operate the latter’s Gigafactory battery manufacturing plant in Nevada, United States. This plant had a total output of 24 Gigawatt-hours in 2019, which was below its full capacity. The Gigafactory is responsible for manufacturing the battery cells which are then packed into the power packs for the vehicle by Tesla workers and robots.
9. Brookfield Business Partners L.P. (NYSE:BBU)
Share Price Growth Over the Last 12 Months: 43%
Number of Hedge Fund Holders: 4
Brookfield Business Partners L.P. (NYSE: BBU) owns one of the largest automotive battery suppliers and recyclers in the world, Clarios. Clarios was formerly the battery manufacturing arm of Ireland-based Johnson Controls, Inc and it has several manufacturing investments in place to produce batteries in the United States. Some of its American battery manufacturing facilities are located in Missouri and Delaware. As of 2019, Clarios claimed to produce one-third of all electric vehicle batteries sold in the world.
Like Enphase Energy, Inc. (NASDAQ: ENPH), Livent Corporation (NYSE: LTHM), Albemarle Corp (NYSE: ALB) and Plug Power Inc. (NASDAQ: PLUG), Brookfield Business Partners L.P. (NYSE: BBU) is one of the favorite battery stocks of hedge funds.
8. Sociedad Quimica Y Minera de Chile (NYSE:SQM)
Share Price Growth Over the Last 12 Months: 69%
Number of Hedge Fund Holders: 19
Sociedad Quimica Y Minera de Chile (NYSE: SQM) is crucial for the integrity of the global lithium battery supply chain. It is the largest producer of lithium, which is the primary material in battery production. The company produces lithium from concentrated salt water referred to as brine, and the company produces both Lithium Carbonate and Lithium Hydroxide. Out of these, Lithium Hydroxide is used in batteries for electric vehicles due to its chemical properties and Sociedad Quimica Y Minera de Chile (NYSE: SQM) produces this material in its facilities in Chile.
Like Enphase Energy, Inc. (NASDAQ: ENPH), Brookfield Business Partners L.P. (NYSE: BBU), Livent Corporation (NYSE: LTHM), Albemarle Corp (NYSE: ALB) and Plug Power Inc. (NASDAQ: PLUG), Sociedad Quimica Y Minera de Chile (NYSE: SQM) is one of the notable battery stocks in the market.
7. Plug Power Inc. (NASDAQ:PLUG)
Share Price Growth Over the Last 12 Months: 89%
Number of Hedge Fund Holders: 34
Plug Power Inc. (NASDAQ: PLUG) is headquartered in Latham, New York and it is responsible for manufacturing fuel cell systems based on Hydrogen. It provides these cells for heavy-duty equipment and trucks and it has partnerships in Europe and Asia for providing its fuel products in collaboration with local companies in the markets.
Like Enphase Energy, Inc. (NASDAQ: ENPH), Brookfield Business Partners L.P. (NYSE: BBU), Livent Corporation (NYSE: LTHM) and Albemarle Corp (NYSE: ALB), Plug Power Inc. (NASDAQ: PLUG) is one of the notable battery stocks in the market.
6. Enphase Energy, Inc. (NASDAQ:ENPH)
Share Price Growth Over the Last 12 Months: 114%
Number of Hedge Fund Holders: 44
Enphase Energy, Inc. (NASDAQ: ENPH) is an alternative energy company that focuses on a variety of products that are related to solar power. Enphase Energy, Inc. (NASDAQ: ENPH) also offers a home powering solution complete with batteries that allow users to store energy in their homes. Additionally, the company is also known for providing microcontrollers that improve the storage capacity of their residential solar-powered systems.
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Disclosure: None. 11 Best Battery Stocks to Buy Now is originally published on Insider Monkey.
